Retail superannuation fund Astarra Funds Management is reviewing its exposure to property after successfully redeeming a direct property mandate from BlackRock.


Astarra had seen nearly all of its $13 million mandate with the Blackrock Direct Property Fund (Australia, class E) returned before the manager began rejecting redemption requests, Rex Phillpott, chief executive officer Astarra, said. The fund’s investment committee applied for the redemption more than a month ago. “After reviewing the mandate and speaking with the manager, the investment committee felt it needed to place a redemption,” Phillpott said. He said the fund was now reviewing the market with its principal consultant at van Eyk, Melissa Randall, in order to make its next allocation to property. Phillpott said the fund had received 99 per cent of its mandate from BlackRock to date because it applied to have its funds redeemed in cash, not units. The BlackRock fund is just one product from the manager that has stopped immediately honouring redemption requests from investors. Ratings agency Standard & Poor’s (S&P) recently revised its grading of the BlackRock Combined Property Income Fund from three stars to ‘on-hold’ after the BlackRock Property Trust, the source of exposures for a number of the manager’s property funds, began deferring the processing and payment of withdrawl requests. BlackRock informed S&P that it would issue a formal withdrawal offer to its property funds investors pending the realisation of assets from the core trust. The timing of this offer, however, is not known. While S&P expected any sale of assets from the trust to be conducted in an orderly way, it would not restore or modify its rating of the fund until redemptions could be paid, the agency stated in a release. Astarra has $380 million in funds under management and $250 under administration.

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